Pages

Wednesday, April 27, 2016

Can Govt raise Rs 2700 cr from NHPC stake sale today?

THE NDA government has begun the disinvestment process of the current fiscal today with the 11.36- percent stake sale in National Hydroelectric Power Corporation (NHPC) at Rs.21.75. This is likely to fetch the exchequer over Rs.2,700 crore. The issue price of Rs.21.75 is at a discount of 5.64 per cent to Tuesday’s (April 26) closing price of Rs.23.05 on BSE.
NHPC’s offer, comprising 1.25 billion shares, is the first disinvestment for fiscal 2017.
“The NHPC OFS will happen tomorrow (Wednesday) at a floor price of Rs.21.75 a share,” a government... official said. The government holds 85.96 per cent in NHPC and selling over 125 crore shares or 11.36 per cent would help it comply with minimum public shareholding norms.
If the offer is successful, the government’s stake in NHPC will drop to 74.6% and make it compliant with the Securities and Exchange Board of India’s (Sebi) minimum public shareholding (MPS) norms.
The government held an 85.96% stake in NHPC at the end of 31 March, according to stock exchange data.
At present, 21 publicly traded PSUs, including NHPC, have promoter holding more than 75 percent.
As the newly-renamed Department of Investment and Public Asset Management (DIPAM) races to meet the budgeted disinvestment target of Rs.56,500 crore, NHPC would be the first PSU stake sale on the block. The government has already lined up over a dozen PSUs for stake sale in the current fiscal.
In October 2014, Sebi mandated all public sector undertakings (PSUs), excluding public sector banks (PSBs), to raise public shareholding to a minimum 25% by 21 August 2017.
NHPC would be the third PSU to be sold under the new offer for sale rules notified by SEBI. While institutional investors would bid in the first day of the OFS, retail investors would get to bid on the second day. NHPCis engaged in generating power through conventional and non-conventional sources, and dedicated to the planning, development and implementation of an integrated and efficient network of power projects in India.